Tax proposals face hostile world

November 25, 1990|By John W. Frece

Annapolis The Linowes commission report could not have arrived at a much worse time.

Three years ago, when Gov. William Donald Schaefer set up the blue-ribbon commission to analyze Maryland's tax system, no one could have guessed that, just as the commission's recommendations were being made public, the United States would be edging toward war in the Middle East.

Nor could anyone have known that the national and state economies would be in a tailspin, that the price of oil would have soared, that unemployment and inflation would be inching up, that the state budget would be in the red, or that the federal government would be about to raise taxes to offset a portion of its huge deficit.

Who in the boom days of 1987 could have predicted that, by late 1990, Maryland voters -- suddenly worried by the collapse of financial institutions and paralyzed by their increasing inability to make ends meet -- would be in open rebellion against high taxes and cynical about the abilities of the people they have entrusted with public office?

Yet it is in these unhappy circumstances that the long-awaited report of the governor's Commission on State Taxes and Tax Structure has finally surfaced.

But R. Robert Linowes, the Montgomery County lawyer who has chaired the commission through three often-trying years, reads the public mood differently. As long as Marylanders are assured their tax dollars are well spent, he says, they could be convinced of the necessity to change and even raise taxes. Basic fairness, coupled with strict accountability, can be a powerful argument, he believes.

But Mr. Linowes' view of the voters' mood, at least in the short term, appears to be the minority view. Returning state legislators, many still bruised from re-election campaigns that nearly sent them into other lines of work, say that what the voters were saying this year was: "Read my lips: No new taxes."

Those who have been around Annapolis a while, however, know that there is a longer horizon, that changes of this magnitude rarely occur at once, and rarely so soon after the ideas have been placed on the table.

Delegate Timothy F. Maloney, D-Prince George's, predicts that the report will suffer a fate similar to that which befell the new Maryland constitution proposed by a constitutional convention in Voters soundly rejected the overall revision, but then subsequently adopted many of its major recommendations piecemeal over the succeeding years.

Lt. Gov. Melvin A. Steinberg, who after 20 years in the legislature understands the pace of the place, says he could be content if the report's major recommendations are at least fully discussed and debated in the coming three-month session.

The most obvious problem with the report, many lawmakers say, is that it is just too much to digest at one time. It affects almost every type of tax that state and local governments levy and even recommends a few new ones. In the first year alone, it would raise more than $1 billion in new revenues, while at the same time reducing other taxes by an estimated $248 million.

Such wild fluctuations in the tax system, affecting so many people in so many ways, would be so overwhelming, and so controversial, that they have, for now, obscured the important goals of the commission's work: to make Maryland's tax system fairer, and to find ways to redistribute the state's wealth to reduce the sharp financial disparities that have so long hurt Baltimore and the poorest counties.

Not surprisingly, Governor Schaefer has been cautious about saying which of the commission's recommendations he will push, but it is not likely he will leave on the shelf the product of a commission he appointed and whose recommendations he has already generally embraced.

But there is a real risk that Mr. Schaefer's unbridled impatience may force a premature conclusion to the debate on some of the report's key recommendations.

The worst thing the governor could do, suggests one Baltimore lawmaker, is treat the Linowes recommendations the way he treated his proposal to build a residential high school for the state's best math and science students. Once the legislature rejected that plan, the governor, personally offended, refused to put it back on the table a second time.

"He cannot see [the Linowes recommendations] as something that if he doesn't get it this year, that's it," said the lawmaker, who, like other legislators, believes there is a lengthy, if zigzagging, political course the recommendations must inexorably follow before they face any chance of enactment.

But for the 69-year-old Mr. Schaefer, time is always running out. And this report, after all, arrives just as he begins his final term as governor and, perhaps, his last four years in public life.